Chairman, All Pakistan Textile Mills Association (Aptma), Mohsin Aziz, has urged government to announce a relief package for textile industry which badly hit by unprecedented electricity and gas crisis. He said there is an urgent need of rescheduling of loans and 50 per cent rebate on mark up for long-term loans to avert massive closure of textile industry due to unprecedented energy crisis in the country.
He said textile industry, particularly in the province of Punjab, was showing alarming downward trends in exports as well as local production since last two quarters due to energy shortage. The whole industry was facing acute financial crunch, unable to repay loans to banks, he added. According to him, the volume of Non-Performing Loans (NPLs) of the textile industry surged to the tune of Rs 188 billion in September 2011 against Rs 171 billion in December 2010. Also, he added, the infection ratio of NPLs for textile industry has surged to 31.5 per cent in September 2011 against 24.3 per cent in December 2010.
He said textile exports are also down in value terms, dwindling 17 per cent down in January 2012 against corresponding period, keeping monthly exports below one billion dollar, which was on an average over $1.2 billion during 2010-11. There is a constant decline for the last four months and it is becoming impossible to achieve announced $16 billion export target for current fiscal against $14 billion last fiscal year and it is likely to stay below $12 billion. He said the textile industry was not generating export surplus in the absence of gas and electricity. He said gas supplied remained disconnect for 172 days during last calendar year besides average load shedding of six to eight hours a day on independent and grouped feeders.
Chairman Aptma said textile exports have registered unprecedented decline in quantitative terms since November 2011. He said exports of cotton cloth, knitwear, bed wear and towel have declined by 40 per cent, 35 per cent, 30 per cent and 22 per cent in January 2012 against the corresponding period. He said the textile industry was heading fast towards a collapse. He said massive litigation would be a direct outcome of the situation, as the textile industry was not in a position to keep its capacities operational due to unprecedented energy crisis.
He said the textile industry becomes unviable if it is unable to be operational 24/7 for 365 days a year, as it is highly capital intensive industry and can attain efficiency only if operations remain intact. However, the prevailing situation is quite contrary to the industry viability; therefore, bank servicing was becoming difficult with every passing day.